Age Pension Income Test

One of two Centrelink means tests used to determine Age Pension eligibility and payment rate. It assesses your assessable income - including deemed income from financial assets - against thresholds, with your pension reducing as your income rises above them.

For financial assets - think both bank accounts and more speculative investments like shares or crypto - Centrelink uses deeming rates rather than what those assets actually earn. Essentially it's the government's way of encouraging productive allocation of capital.

What that means is:

• Centrelink assumes a set return on financial assets. As of July 2026, for a couple where at least one person gets a pension, the first $110,600 of combined financial assets is deemed at 1.25% p.a., and everything over $110,600 is deemed at 3.25% p.a. (rates and thresholds are updated from time to time, and differ for singles)
• If your investments return more than the deemed rate - say your shares pay dividends and grow at 8% while Centrelink only deems 1.25% or 3.25% - the extra upside stays with you for Age Pension purposes
• If they earn less, you're still assessed as if they earned the deemed rate

The income test is run alongside the assets test. Whichever test produces the lower payment is the one that applies.

For more detail on how Canwi models the income test in your plan - including assessable income, the free area, and deeming - see Income Test for Aged Pension in the Canwi Help Center.